The National Audit Office’s (NAO) report into the Energy Company Obligation scheme revealed considerable issues in the delivery of home energy efficiency measures.[1] Published last month, the report found that approximately 97 per cent of properties surveyed required repairs, with more than 20,000 homes affected by faulty installations. These findings emerged shortly before the rumoured delays to the £13billion Warm Homes Plan (WHP).[2] This was expected to be the next major policy vehicle for cutting household emissions and tackling fuel poverty. For Government and industry alike, the question is how to ensure that lessons from ECO are embedded before the new scheme is rolled out.
The Challenge for Government
The timing of the NAO’s findings poses a challenge for a Labour Government already facing pressures over its Clean Power Action Plan. Both the Conservative Party and Reform UK have called for the national Net Zero target to be scrapped.[3] When the Conservative Party pledged to repeal the 2008 Climate Change Act earlier this month, it suggested that this legislation forced Government decisions that negatively impact household finances. As an example, the Party criticised the so-called ‘boiler tax’, officially known as the Clean Heat Market Mechanism. This involves fining boiler manufacturers who fail to meet heat pump sales targets. The Party reportedly argued this policy raises the cost of gas boilers to push people towards adopting heat pumps.[4] Uptake of low-carbon technologies such as heat pumps will rely on households believing that installations are safe, effective, and ultimately benefit – not cost – consumers. Without this confidence, even generous funding may struggle to translate into meaningful delivery.
Portraying a ‘Just Transition’
A striking aspect of the NAO’s findings is the distributional impact of the faulty home upgrades made. The ECO scheme was designed to support those most in need. This involved helping low-income households reduce their bills and alleviating fuel poverty. Yet, in many cases, the opposite has occurred. Poor workmanship and inadequate oversight have left some of the most vulnerable households with damp, mould, and costly repairs.
This outcome cuts against one of the central tenets of the Government’s Net Zero agenda: a just transition. Ministers have consistently emphasised the need to bring communities along on the path to clean power. This spans from local energy projects, to targeted support for fuel-poor households. The Government has focused on ensuring that low-carbon initiatives are not viewed as reserved for middle- and upper- class households. However, the NAO’s report risks undermining this narrative. Rebuilding trust will require tangible evidence that the WHP and future initiatives will not repeat these mistakes.
Getting the Response Right – Forthcoming Government Action
The Government has signalled its intent to address the issues raised in the NAO’s report. In a written statement, Energy Consumers Minister Martin McCluskey outlined 3 clear points of action:
- Ensuring that work is carried out in homes correctly, possibly through trained or accredited workers.
- Improving consumers’ experience in navigating the process to access home upgrades, such as by reducing organisational complexity and better signposting.
- Guaranteeing timely resolution where issues arise, potentially including clearer lines of accountability.[5]
Conclusions
The NAO’s report reinforces key decisions that lie ahead for the Labour Government in delivering its Net Zero targets. Labour has the opportunity to present the WHP as a reset in approach to home energy efficiency delivery. It could improve public trust in the UK’s broader Net Zero strategy, and reaffirm that decarbonisation and social equity go hand in hand. However, the public must be persuaded of the benefits, whether eco or economic. Otherwise, the Government risks entrenching skepticism in its Net Zero transition. Credibility will depend less on the scale of investment and more on the strength of the consumer protections that underpin it.
With further delays to the Plan’s publication, the Government faces pressure to deliver these objectives under a tight timeline.[6] For industry, the delivery of the WHP in light of the NAO’s report represents a reputational and operational test. This requires delivering consistently high standards, building public confidence, and showing that large-scale retrofitting can be executed safely and effectively.
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[1] National Audit Office, Energy efficiency installations under the Energy Company Obligation, 14 October 2025, Link.
[2] The Times, Ed Miliband’s £13bn warm homes plan delayed after row over energy costs, 16 October 2025, Link.
[3] BBC News, Tories pledge to scrap landmark climate legislation, 2 October 2025, Link.
[4] The Guardian, As Tories vow to scrap ‘failed targets’, how do their climate claims stack up?, 3 October 2025, Link.
[5] UK Parliament, Retrofit measures under ECO4 and GBIS, 13 October 2025, Link.
[6] The Times, Ed Miliband’s £13bn warm homes plan delayed after row over energy costs, 16 October 2025, Link.
